TAXI MEDALLION COST PUSHED TO $100,000 BY HEAVY DEMAND

By DEIRDRE CARMODY

Published: December 16, 1985

A taxi medallion has been sold for $100,000, a record for the price of these taxi licenses, which once cost $10.

The number of medallions has been frozen since 1937 so by law there are only 11,787 medallions, which license cabs to pick up street hails, in the city. But demand has been rising rapidly and so has the price. Three months ago, for instance, taxi medallions sold for $75,000 to $80,000.

The first medallion to hit the $100,000 mark was sold earlier this month to a 30-year-old Asian, Stanley Cheung, who lives on the Lower East Side. He is like so many of the city's cabdrivers over the years - energetic young immigrants able to borrow enough money to buy a medallion and a cab and take off in pursuit of the American dream.

A New Kind of Buyer

However, according to Jay L. Turoff, chairman of the New York City Taxi and Limousine Commission, a medallion has been rising in value so much that it is producing a new kind of buyer - the doctor or lawyer or other professional who looks upon the medallion simply as an investment.

''Two things are happening in the industry because of the high price,'' Mr. Turoff said. ''Many buyers are going in as partners. Then because of the start-up of leasing companies, owners are turning the medallions over to these companies who see that the medallion is put on a car and leased for two shifts a day.''

There are two kinds of medallions -fleet medallions, which under law go on cars that have to be operated at least 20 hours a day, and owner-operated medallion cabs, which have to be on the street at least 12 hours a day. Some taxi drivers say owner-operated cabs are not always on the street for as many hours as they are required to be. There are 6,818 fleet medallions and 4,969 owner-operator medallions.

''I don't particularly like it,'' Mr. Turoff said of the new kinds of owners who are neither fleet owners nor operate their own cabs. ''I'm not ready to say whether it's good or bad, but when a man owns the tin, he has a vested interest in it and there is more pride in what he's doing than when he turns it over to a second party.''

By law medallions must be bought and sold through brokers, who have been licensed since only the beginning of the year. The Taxi and Limousine Commission, which regulates the industry, tries to keep a close watch over the activities of brokers to assure that there is no manipulation of medallion prices.

The sale of the first $100,000 medallion was handled by a broker, Nat Goldbetter of Medallion Transfer.

'A Long Day's Work'

Mr. Cheung is an owner-driver. Born in Hong Kong in 1955, he came here 10 years ago. At first he went to school and worked in a wholesale vegetable market run by Asians on the Lower East Side. Then he began driving a leased cab. His wife works as a seamstress.

He says he drives his cab 12 or 13 hours a day. He says he does not know how many years he will continue driving his cab. He has heard that since he bought his medallion, another medallion has been sold for $105,000. If the price keeps going up, he said, he may sell his medallion in a few years and do something else.

''There are things better than driving a cab,'' he said.

Last April, Mayor Koch proposed increasing the number of yellow medallion cabs in New York by 1,200, or 10 percent of the existing number.

Under the plan, which the Mayor offered to the City Council, the added medallions would be made available through an auction. Later, the city would consider whether to auction more medallions, in increments of 1,200.

Mr. Koch's proposal is still before the Council pending the completion of an environmental-impact study, a special adviser to the Mayor, Jack Lusk, said yesterday.

According to Mr. Turoff, about 1,600 medallions change hands every year. Banks give mortgages for medallions, usually charging 14.5 to 15 percent interest. The bank typically requires a down payment of 20 percent, Mr. Turoff said, and the owner-driver might have to get a second mortgage from a credit union or another source to finance the rest.

Many Ethnic Groups

There is now about $750 million outstanding in mortgages held by banks and credit unions, according to the Taxi and Limousine Commission. The principal lenders are Citibank, Chemical and Chase Manhattan banks.